On Day 8, we started tracking our spending—because knowing where your money is going is a crucial step to managing it better. (Be sure to continue jotting down your expenses while we move on to the next few steps. As mentioned, we’ll revisit your spending.)

So, I have a question for you…how’s your organizational system? Do you even have one?

If you were asked to pull up your most recent credit card statements or gather documents so you can file your taxes, would you be able to do that quickly or would you have to search for a shoebox you “know you have somewhere” or rummage through your kitchen junk-drawer?

Being organized comes naturally for some, but for others, not so much. If you fall in the latter camp, that doesn’t mean you’re off the hook. It’s necessary for everyone (even you) to have a system in place for managing bills and financial documents.

If you don’t have an organizational system in place, it’s time to get one. Being organized is an essential part of managing your money well.

Action Step

Get Organized!

Okay, don’t get frightened by the sight of this. Once you get organized, it will make handling your bills so much easier—I promise!

This was created as a paper filing system, but if you prefer to do it electronically, you can apply the same approach on your computer. Most likely you will end up with a hybrid system—folders for those items that need to be physically maintained and files on your computer for everything else.

Already have a system in place? Compare it to the one below to make sure you have everything covered.

Time Needed

Set aside an hour or two to do this, depending on how (un)organized you are now 😉 (If you can’t do this today, commit to doing it soon (like tomorrow!) because the next few steps will build on this!)

Materials Needed

12 hanging file folders and 40-50 file folders if you’re a “paper person.” (Much less if you’ll be doing an electronic or hybrid system.)

An existing filing cabinet or portable filing box.

Directions

Gather up all your current bills and financial paperwork.

Label one hanging file folder for each of the 12 categories below.

Within each hanging folder, use one file folder to represent each account you have in that category.

If you’re doing this on your computer, create a folder for each category, and then nest subfolders accordingly.

The folder for the current year should be used to store receipts throughout the year that you will need at tax time as well as to collect your tax documents as you receive them. When it’s time to do your taxes, everything will be in one place!

2. Retirement Accounts

Keep all of your retirement account statements here. Designate one file for each account you have, and label it accordingly. This is where you will file your quarterly statements as well as any initial sign-up documents you have.

Utility Accounts / Household Bills
Use and label one folder for each utility or service account you have (electricity, gas, internet, cable, phone, cell phone, etc.) and file your monthly statements here.

7. Debt

This folder should hold the records for any debt you have outside of your mortgage (credit cards, car loans, student loans, tax debt, personal loans, etc.) Include any accounts you may have in collections. Label one folder for each loan/account, and in it place the original terms of the loan/agreement as well as the monthly statements.

8. Other Bills

This folder holds any other bills you have outside of your debts and household accounts like gym memberships, subscriptions, etc. Anything that you pay on a recurring basis. Label one folder for each account. If you have a lot of medical and dental bills, you may want to create a folder for them as well.

9. Car

Use this folder to file your car title and maintenance and repair records. If you have more than one car, use one file folder for each.

10. Insurance

All your insurance documents go here. Create a separate folder for each policy (life, auto, homeowners, renters, etc.). Include the original policy documents as well as any monthly statements you receive.

11. Family Will or Trust

A copy of your will or living trust goes in here.

12. Children’s Accounts

If you have kids, use this folder for any bank accounts and investments you have for them. Label one folder for each account.

Okay, you’re done! You’ll end up with 12 folders if you have kids (11 if you don’t). Feel free to add any folders if your situation warrants it.

You now have an organized system to store and keep track of all your bills and financial documents!